An educated approach

Consortium helps private colleges hold down health-care costs

It took eight years of planning, but in early 2010, 3,000 employees at 12 private colleges gained health-care coverage through the Council of Independent Colleges in Virginia Benefits Consortium.

Paul Davies, associate vice president of administration and finance at Randolph-Macon College, one of the consortium members, says one of the biggest challenges was obtaining the state’s permission for the independent colleges to bid together for health insurance coverage. In addition, the consortium had to analyze each of the schools’ individual plans and come up with an offering that would satisfy everyone. “We’re trying to do what we can to control the costs. Increases in our health insurance costs ultimately affect tuition costs,” Davies says.

The schools believed that they could get better terms together than they could individually. So far, it’s working. For the first year, most schools saw a decrease or no increase in health insurance costs. “We’re expecting our rates next year to be up about 8 percent, which is less than the 12 percent that we see trending in Virginia,” he says. The consortium contracted with Anthem Blue Cross Blue Shield and hired an administrator to oversee the plan.

Davies says the colleges, all part of the Council of Independent Colleges in Virginia, may have been the ideal collection of organizations. “We can only freeze salaries so often, and we know that parents are hurting. We cannot continue to increase tuition 5 to 6 percent every year. So we saw the value in working together,” he says. In addition, they all had confidence that each of the schools would continue to exist for years to come. “The 12 schools in the initial consortium are collaborative. We understand that I may have a bad year this year, and you may have had a good one, but next year it can be the other way around.”

For the second year of the plan, the consortium is adding a wellness plan. “Employees tend to stay at colleges for a long time, so there’s a benefit to us short-term and long-term to having healthier employees.”